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Key Takeaways Growth advantages can quickly become liabilities when customers exit faster than expected.
Fixed costs don’t vanish — they become more painful as users leave.
A lot of leaders talk about economies of scale and network effects. It’s a clean story: more people means better unit economics, you amortize fixed costs and the system feels stronger. But there’s a version of that story that people avoid.
The same advantages that make a business model favorable can also flip when people start leaving. And if you don’t plan for that, you can wake up in a situation where the math that used to protect you is now what’s hurting you. The “off-grid problem” is a good way to see this dynamic in the real world. It’s not about ideology. It’s about the mechanics of who pays for fixed costs when the customer base changes.
What “off-grid” really means, and why it matters
Here’s the intuition.
In power, there’s a grid with fixed costs. Wires, maintenance, capacity planning, all the stuff that has to exist even if demand is a little lower this month. Retail electricity bills typically include some mix of a fixed charge and a usage-based charge, but either way, the system is trying to recover those costs across the customer base.
When more people stay on the grid, those fixed costs get spread across more people, and it’s easier for the system to work.
Now introduce solar and batteries. The customers who can afford solar and batteries can reduce their reliance on the grid or leave it more aggressively. The fixed costs do not disappear. They get spread across fewer people, and everyone else’s bills go up. You can see this in the NEM revisit, where regulators are explicitly debating how rooftop solar customers should pay their share of the grid’s fixed costs.
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